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Alex J.
Alex J., Solicitor
Category: Property Law
Satisfied Customers: 3655
Experience:  Two years conveyancing experience.
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There is still an outstanding mortgage on my property. I

Customer Question

There is still an outstanding mortgage on my property. I have sufficient capital to build a small bungalow in the orchard, then sell the main building. Can I do this?
Submitted: 2 years ago.
Category: Property Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

It is possible to do what you have suggested however you will need to do the following:
1.You will need the consent of the bank because you will be dividing their security into two parts and disposing of part of it - the bank may require you to repay them in full upon the sale of the main building;
2. You will need to apply to the Land Registry to split the land (i.e the main building and new building) into two parts and have two separate titles.
3. You should take some tax advice - if you are currently living in the main building then by selling you could claim this to be your primary residence and therefore you may be exempt from paying capital gains tax.

Did you have any specific concerns?

Kind regards

AJ